Company Reports

Prudential Financial provides a variety of financial services products, including life insurance, annuities, retirement plan services, and investment management products in various countries. The investment management business has achieved adequate scale and is a source of stable earnings, strong operating margins, and maintained cash flows for the company.

No-moat Prudential Financial reported steady fourth-quarter results as after-tax adjusted operating income came in at $943 billion or $2.58 per share in the current quarter versus $932 million or $2.49 per share in the fourth quarter of the previous year. The fourth-quarter results were adversely affected by restructuring charges of around $200 million, and lower variable investment income, which was partially offset by the benefits from a higher interest rate environment. After removing the one-time charges, we think that the results in the current quarter are decent. The adjusted book value per share, which removes the impact of accumulated other comprehensive income, or AOCI, was reported at $96.6 per share in the current quarter, up 2.0% from the $94.7 per share in the fourth quarter of the previous year. The company announced a 4% rise in the quarterly dividend to $1.30 per share, which represents approximately 5.0% ($5.2/$103) dividend yield as of the current stock price. We are maintaining our $105 fair value estimate for Prudential Financial after incorporating the fourth-quarter results.

No-moat-rated Prudential Financial posted a good set of numbers in the third quarter. Aftertax adjusted operating income was $1.26 billion, or $3.44 per share, versus $0.89 billion, or $2.37 per share, in the year-ago quarter. These results reflect the benefits from higher interest rates, more-favorable variable investment income, and underwriting experience, partially offset by lower fee income. Adjusted book value per share, which removes the impact of accumulated other comprehensive income, was reported at $94.20, down 2.3% from $96.40 in the third quarter last year. Prudential paid a quarterly dividend of $1.25 per share, which represents approximately a 5.4% dividend yield at the current stock price. We are maintaining our $105 fair value estimate after incorporating third-quarter results.

Prudential Financial provides a variety of financial services products, including life insurance, annuities, retirement plan services, and investment management products in various countries. The investment management business has achieved adequate scale and is a source of stable earnings, strong operating margins, and maintained cash flows for the company.

No-moat-rated Prudential Financials’ second-quarter results were largely in line with our expectations. The company reported aftertax adjusted operating income of $1.09 billion or $2.94 per share in the current quarter, versus $0.89 billion or $2.34 per share in the prior-year second quarter. These second-quarter results reflect underlying business growth, benefits of a higher interest-rate environment, and favorable underwriting experience, which elevated expenses and lower variable investment income partially offset. The adjusted book value per share, which removes the impact of accumulated other comprehensive income, was reported at $97.38 per share versus $97.91 per share in the second quarter of the previous year. The company paid a quarterly dividend of $1.25 per share, which represents approximately 5.3% dividend yield as of the current stock price. We are maintaining our $105 fair value estimate after incorporating the second-quarter results.

No-moat-rated Prudential Financials’ first-quarter results marked the benefits of a higher interest rate environment that were offset by lower variable investment income, lower fee income, and elevated seasonal mortality experience. The company reported after-tax adjusted operating income of $990 million or $2.66 per share in the first quarter versus $1.19 billion or $3.10 per share in the first quarter of the previous year. The company paid a quarterly dividend of $1.25 per share in the first quarter, which represents approximately a 6% dividend yield as of the current stock price. We are maintaining our $105 fair value estimate for Prudential Financial after incorporating the first-quarter results.

Prudential Financial provides a variety of financial services products, including life insurance, annuities, retirement plan services, and investment management products in various countries. The investment management business has achieved adequate scale and is a source of stable earnings, strong operating margins, and maintained cash flows for the company.

No-moat-rated Prudential Financial reported fourth-quarter results that were mostly in line with our expectations. The company reported after-tax adjusted operating income of $907 million or $2.42 per share in the fourth quarter versus $1.23 billion or $3.18 per share in the fourth quarter of the previous year. The company has authorized share repurchases of up to $1 billion in 2023 and a 4% increase in the quarterly dividend to $1.25 per share. We are maintaining our $105 fair value estimate for Prudential after incorporating the fourth-quarter results.

No-moat-rated Prudential Financial reported disappointing third-quarter results with adjusted operating income of $2.13 per share, down 44% compared with $3.78 per share in the previous year. The third-quarter results were mainly impacted by lower variable investment income and unfavorable underwriting in the international business due to an elevated level of COVID-19 hospitalization claims in Japan. The weakness in the variable investment income in the current quarter was in line with our expectations given the market valuations. Interest rates have moved up significantly in the past few months, and we do expect the company to benefit from the higher interest rates in the long run given the dynamic of the life insurance business. We are maintaining our $105 fair value estimate for Prudential after incorporating the third-quarter results.

We are relaunching Prudential Financial with a fair value of $105 per share after taking a fresh look at our assumptions. Our fair value estimate implies that Prudential is slightly undervalued currently. Prudential provides a variety of financial services products, including life insurance, annuities, retirement plan services, and investment management products in various countries. We assign a no-moat rating, a stable moat trend, and a standard capital allocation rating to the company.

Prudential provides a variety of financial services products, including life insurance, annuities, retirement plan services, and investment management products in various countries. The investment management business has achieved adequate scale and is a source of stable earnings, strong operating margins, and maintained cash flows for the company.

Prudential reported a messy second quarter. Adjusted earnings per share of $1.74 missed the FactSet consensus estimate of $2.37 as the firm took a large hit to increase its reserves during its annual assumption review. Specifically, as the pandemic enters an endemic phase, Prudential increased its mortality assumption. Variable investment income though down from the year-ago period was strong and we expect this to continue to moderate in the coming quarters. As we tweak our model, we are slightly reducing our fair value estimate to $95 from $97 to reflect recent macroeconomic headwinds. Given Prudential’s performance and financial profile, we are also reducing the Morningstar Uncertainty Rating to Medium from High.

Prudential Financial, like other life insurers, is operationally leveraged to capital markets. Low interest rates, which have been an ongoing headwind in recent years, have become a greater headwind amid the coronavirus. It’s unlikely that interest rates return to historical levels and thus we expect Prudential to continue to face this headwind for the foreseeable future.

Prudential Financial, like other life insurers, is operationally leveraged to capital markets. Low interest rates, which have been an ongoing headwind in recent years, have become a greater headwind amid COVID-19. It’s unlikely that interest rates return to historical levels and thus we expect Prudential to continue to face this headwind for the foreseeable future.

Prudential reported a good start to 2022. Adjusted earnings per share of $3.17 topped the FactSet consensus estimate of $2.70. Higher variable investment income largely drove the beat, but we expect this to significantly moderate in coming quarters, particularly with the recent decline in public and private company valuations. Overall, there was little in no-moat Prudential’s earnings release that would alter our long-term view of the stock and we will maintain our fair value estimate of $97.

Prudential Financial, like other life insurers, is operationally leveraged to capital markets. Low interest rates have been an ongoing headwind in recent years, and became a greater headwind amid COVID-19. It’s unlikely that interest rates return to historical levels and thus we expect Prudential to continue to face this headwind for the foreseeable future.

Prudential reported a strong finish to 2021 with adjusted EPS Of $3.18 easily topping the FactSet consensus of $2.36. Similar to peer MetLife, variable investment income continues to be elevated, and we expect this to normalize. Excluding variable investment income, underlying business trends were generally mixed. We will maintain our no-moat rating and our $90 fair value estimate on Prudential's shares.

Prudential Financial, like other life insurers, is operationally leveraged to capital markets. Low interest rates have been an ongoing headwind in recent years, and became a greater headwind amid COVID-19. It’s unlikely that interest rates return to historical levels and thus we expect Prudential to continue to face this headwind for the foreseeable future.

No-moat rated Prudential reported a solid quarter with adjusted operating EPS of $3.78, well above the FactSet consensus of $2.76 as variable investment income was elevated. Fee income was also generally solid, but underwriting trends were generally negative. Overall, there was little that would alter our long-term view of the firm, and we will maintain our fair value estimate of $89.

Prudential Financial reported solid second-quarter financial results with adjusted earnings per share of $3.79, which compares to the FactSet consensus of $3.11 and management's baseline outlook of $2.89. Looking ahead, Prudential expects a baseline third-quarter 2021 EPS of $2.59, which compares with the FactSet consensus of $2.93 and has headwinds of higher nonrecurring expenses and higher coronavirus claims relative to the second quarter. We will maintain our no-moat rating and fair value estimate of $89.